november 3, 2016 advice letter 5047-g subject: annual ... · 4 al 4513-a is effective from november...

STATE OF CALIFORNIA Edmund G. Brown Jr., Governor

PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

November 3, 2016

Advice Letter 5047-G

Ronald van der Leeden

Director, Regulatory Affairs

Southern California Gas

555 W. Fifth Street, GT14D6

Los Angeles, CA 90013-1011

SUBJECT: Annual Regulatory Account Balance Update for Rates Effective

January 1, 2017

Dear Mr. van der Leeden:

Advice Letter 5047-G is withdrawn per SoCalGas withdrawal letter dated October 31, 2016.

Sincerely,

Edward Randolph

Director, Energy Division

October 17, 2016 Advice No. 5047 (U 904 G) Public Utilities Commission of the State of California Subject: Annual Regulatory Account Balance Update for Rates Effective

January 1, 2017 Southern California Gas Company (SoCalGas) hereby submits for approval with the California Public Utilities Commission (Commission) revisions to its revenue requirement and rates effective January 1, 2017. Purpose This filing, made each year on or before October 15th,1 complies with the longstanding practice of updating SoCalGas’ revenue requirement for projected year-end regulatory account balances as authorized in Decision (D.) 14-06-007, SoCalGas’ Triennial Cost Allocation Proceeding (TCAP). This filing revises SoCalGas’ rates to incorporate the projected 2016 year-end regulatory account balances in transportation rates effective January 1, 2017. In compliance with D.11-04-032, this filing also revises the Backbone Transportation Service rate effective January 1, 2017. In addition, in compliance with D.14-06-007, this filing revises SoCalGas’ 2016 revenue requirement for Company-Use (CU) Fuel and Unaccounted For (UAF) Gas costs based on the updated Gas Price forecast as shown in Attachment C. Furthermore, as required by D.15-10-032, Attachments H and I include the requested tables detailing information on among other things the forecasted revenue requirement for Greenhouse Gas (GHG) costs and the GHG allowance proceeds. However, as explained below, SoCalGas is not requesting to place these revenue requirements in rates at this time.

1 October 15, 2016 falls on a Saturday, so the filing date is moved to Monday, October 17, 2016.

Ronald van der LeedenDirector

Regulatory Affairs

555 W. Fifth Street, GT14D6 Los Angeles, CA 90013-1011

Tel: 213.244.2009 Fax: 213.244.4957

[email protected]

Advice No. 5047 - 2 - October 17, 2016 Background The revenue requirement related to the regulatory account balances are amortized in rates over 12 months beginning each January 1st. It should be noted that the revenue requirement herein does not include other revenue requirement adjustments2 expected to be authorized by the Commission for implementation in transportation rates effective January 1, 2017. SoCalGas will file an advice letter (AL) consolidating all Commission-authorized changes in its revenue requirement, and the related changes to its rates, at least three days prior to the January 1, 2017 effective date of such rates. Customer Rate Impact – Regulatory Account Balances Total SoCalGas’ transportation revenue requirement will decrease by $286.9 million. The core and noncore customer revenue requirements will decrease by $278.6 million and $8.3 million, respectively, as a result of the regulatory account balance update. Attachment A in this filing shows the Natural Gas Transportation Rate Revenue table summarizing the change in the regulatory account balances and authorized CU Fuel and UAF Gas, the demand determinate for the BTS rate, and corresponding present and proposed rates. Attachment B shows a Summary of Present and Proposed Regulatory Account Balances while Attachments D and E show the calculation of the Pension Balancing Account (PBA) and Post-Retirement Benefits Other than Pensions Balancing Account (PBOPBA) balances to be included in 2017 rates. Attachments F and G show the supporting calculations of the minimum contributions made to the Pension/PBOP Trusts for 2016. Core Customers A $278.6 million decrease in the core transportation revenue requirement reflects the amortization of the projected year-end 2016 regulatory account balances. The decrease is primarily due to a decrease in the undercollected balance in the Core Fixed Cost Account (CFCA) partially offset by decreases in the overcollected balances of the Deductible Tax Repairs Benefit Memorandum Account (DTRBMA), PBA, and PBOPBA as described below.

CFCA – Pursuant to Advice No. (AL) 4877, SoCalGas was authorized to amortize in 2016 rates a CFCA undercollection of $424.3 million. The projected CFCA balance for amortization in 2017 rates is $86.2 million undercollected, representing a revenue requirement decrease of $338.1 million.

2 For example, see SoCalGas Advice No. 5024 - Energy Efficiency Incentive Award for Program Years (PY) 2014 and 2015.

Advice No. 5047 - 3 - October 17, 2016

DTRBMA – Pursuant to AL 4990, rate implementation filing for D.16-06-054, SoCalGas’ Test Year 2016 General Rate Case, SoCalGas is authorized to amortize the DTRBMA overcollected balance of $73.3 million ($51.8 million annually) over a 17-month period beginning August 1, 2016 through December 31, 2017. As discussed below, SoCalGas has updated the DTRBMA overcollected balance to be $53.5 million. As of December 31, 2016, SoCalGas will have amortized $21.5 million ($73.3 million / 17 months x 5 months). SoCalGas’ remaining DTRBMA balance will be $32.0 million ($53.5 million less $21.5 million) to be amortized in 2017 rates. The transportation revenue requirement will increase by $19.8 million with the core’s allocation being $18.6 million. As discussed above, at August 1, 2016, SoCalGas incorporated a revenue requirement adjustment for the DTRBMA overcollected balance of $72.1 million (excludes FF&U). As noted at the time, the revenue requirement adjustment was based on a forecast of tax repair deductions at year-end 2015. SoCalGas indicated it expected to update the balance upon filing its 2015 federal and state income tax returns (the federal and state income tax returns were filed on September 15, 2016 and October 15, 2016, respectively). This filing updates the balance in the DTRBMA to reflect the final tax repairs deductions actually claimed on the 2015 tax returns and replaces the revenue requirement previously based on a forecast. The actual tax deductions claimed were $32.2 million less than the year-end 2015 forecast ($121.0 million actual vs. $153.2 million forecast). The actual tax repairs deduction is based on a detailed statistical study of work orders capitalized during 2015 whereas the year-end estimate was based on an average of prior years’ tax repairs deductions. PBA – Pursuant to AL 4877, SoCalGas was authorized to amortize in 2016 rates a PBA overcollection of $36.5 million. The projected PBA balance for amortization in 2017 rates is $19.0 million overcollected, representing a revenue requirement increase of $17.5 million. The core revenue requirement allocation is $16.4 million. PBOPBA – Pursuant to AL 4877, SoCalGas was authorized to amortize in 2016 rates a PBOPBA overcollection of $23.5 million. The projected PBOPBA balance for amortization in 2017 rates is $1.7 million overcollected, representing a revenue requirement increase of $21.8 million. The core revenue requirement allocation is $20.4 million.

The major components of the core revenue requirement increase are as follows:3

3 Amounts shown include franchise fees and uncollectibles.


Core RevenueDescription Requirement

Increase / (Decrease)(in millions of $)

CFCA (338.1)

DTRBMA 18.6

PBA 16.4

PBOPBA 20.4

Other Regulatory Accounts - net 4.1

Total Core Revenue Requirement (278.6) Noncore Customers An $8.3 million decrease in the noncore transportation revenue requirement reflects the amortization of the projected year-end 2016 regulatory account balances. The decrease is primarily due to a change in the Noncore Fixed Cost Account (NFCA) balance from an undercollection to an overcollection and a decrease in the undercollected balance for the System Reliability Memorandum Account (SRMA) partially offset by a change in the Noncore Storage Balancing Account (NSBA) balance from an overcollection to undercollection and an increase in the undercollected balance of the California Solar Initiative Thermal Program Memorandum Account (CSITPMA) as described below.

NFCA – Pursuant to AL 4877, SoCalGas was authorized to amortize in 2016 rates a NFCA undercollection of $4.2 million. The projected NFCA balance for amortization in 2017 rates is $2.0 million overcollected, representing a revenue requirement decrease of $6.2 million. SRMA – Pursuant to AL 4877, SoCalGas was authorized to amortize in 2016 rates a SRMA undercollection of $22.6 million. Pursuant to AL 4866-A, SoCalGas is authorized to recover $4.7 million in system reliability costs incurred for the period of September 1, 2014 through August 31, 2015. Including adjustments for the Memorandum In Lieu of Contract4 covering the same period, SoCalGas will amortize $7.9 million in 2017 rates representing a revenue requirement decrease of $14.7 million. The noncore revenue requirement allocation of this decrease is $9.4 million. NSBA – Pursuant to AL 4877, SoCalGas was authorized to amortize in 2016 rates a NSBA overcollection of $0.5 million. The projected NSBA balance for amortization in 2017 rates is $3.6 million undercollected, representing a revenue requirement increase of $4.1 million. The noncore revenue requirement allocation of this increase is $2.7 million.

4 AL 4513-A is effective from November 1, 2013 to October 31, 2014 per Resolution G-3485 and continues for two subsequent one-year terms ending not later than October 31, 2016.


CSITPMA – Pursuant to AL 4877, SoCalGas was authorized to amortize in 2016 rates a CSITPMA undercollection of $12.4 million. The projected CSITPMA balance for amortization in 2017 rates is $19.6 million undercollected, representing a revenue requirement increase of $7.2 million. The noncore revenue requirement allocation of this increase is $2.6 million.

The major components of the noncore revenue requirement decrease are as follows:3

Noncore RevenueDescription Requirement

Increase / (Decrease)(in millions of $)

NFCA (6.2)

SRMA (9.4)

NSBA 2.7

CSITPMA 2.6

Other Regulatory Accounts - net 2.0

Total Noncore Revenue Requirement (8.3) Revision to the BTS Rate Pursuant to AL 4877, SoCalGas was authorized to amortize in 2016 rates a BTBA undercollection of $0.5 million. As of December 31, 2016, the BTBA is projected to have an undercollected balance of $9.0 million, representing a BTS revenue requirement increase of $8.5 million. Additionally, SoCalGas updated the BTS Demand pursuant to D.11-04-032. The calculation of the proposed BTS rate for 2017 is detailed below:

Advice No. 5047 - 6 - October 17, 2016 Update to BTS Rate

Present Proposedincrease

(decrease)Unbundled BTS Revenues w /FFU ($000's) $147,526 $147,526 $0

PSRMA-BBT SCG w /o FFU $000 $3,611 $3,611 $0

PSRMA-BBT SDG&E w /o FFU $000 $0 $0 $0

SECCBA-BBT SCG w /o FFU $000 $4,349 $4,349 $0

SECCBA-BBT SDG&E w /o FFU $000 $23 $23 $0

SEEBA-BBT SCG w /o FFU $000 $23,721 $23,721 $0

SEEBA-BBT SDG&E w /o FFU $000 $17 $17 $0

TIMPBA-BBT w /o FFU $000 $13,333 $13,333 $0

BTBA w /o FFU ($000's) $535 $9,007 $8,472

FFU Rate 1.0174 1.0174 0.0000

Balancing Accounts w / FFU ($000's) $46,382 $55,001 $8,619

BTS Revenue w /FFU ($000's) $193,907 $202,526 $8,619

BTS Demand Dth/Day 2,851,800 2,740,828 (110,972)

BTS rate w /FFU $/dth day $0.18629 $0.20244 $0.01616

Revenue Requirement Change in CU Fuel and UAF Gas costs Pursuant to D.14-06-007, the Commission authorized SoCalGas to update the underlying gas price used in determining the authorized costs for Other CU Fuel and UAF Gas. On an annual basis, SoCalGas would update the underlying gas price in the October filing using a forecast of Southern California Citygate gas prices for the next year that is based on current futures prices. As shown in Attachment C, SoCalGas forecasts the average gas price of $3.38/MMBtu, an increase of $0.21/MMBtu from the $3.17/MMBtu authorized for rates effective January 1, 2016. Based on this updated gas price forecast, SoCalGas proposes to revise its authorized costs for Other CU Fuel and UAF Gas to $26.9 million, an increase of $1.7 million compared to the present revenue requirement as shown in the calculation below:

Advice No. 5047 - 7 - October 17, 2016 Revenue Requirement Change for Gas Price Impact

Present Proposed Increase

Unaccounted For Gas (UAF):

System Volumes Mth/yr 9,748,592 9,748,592

% UAF (as % of end use) 0.761% 0.761%

UAF Volumes Mth/yr 74,205 74,205

Gas Price $/dth $3.17 $3.38

UAF (M$) $23,543 $25,105 $1,562

Company Use Gas: Storage Load Balancing

Volumes Mth/yr 2,914 2,914


Company Use Gas: Storage Load Balancing (M$) $924 $986 $61

Company Use Other:

Annual Average Volumes (Mth/year) 2,425 2,425


Co Use Other (M$) $769 $820 $51

Total Costs $25,236 $26,911 $1,674

Greenhouse Gas (GHG) Revenue Requirement and Reporting Requirements D.15-10-032 addresses the procedures necessary for natural gas corporations to comply with the California Cap on GHG Emissions and Market-Based Compliance Mechanisms (Cap-and-Trade Program), provides a set of tables and requirements for SoCalGas to use to annually forecast compliance costs and allowance proceeds, and requires SoCalGas to include those tables and reasonable supporting information regarding methodologies and assumptions in this Advice filing. On April 7, 2016, the Commission adopted D.16-04-013, which granted limited rehearing of D.15-10-032 on the disbursement of natural gas GHG allowance proceeds to residential ratepayers. The decision also vacated certain Ordering Paragraphs which effectively put on hold the introduction of GHG costs into rates as well as the disbursement of any GHG proceeds. As required by D.15-10-032, Attachment H to this filing includes four of the requested tables, including a brief description of each table. Also, as required by D.15-10-032, Attachment I to this filing includes Table B (Recorded GHG Costs) and SoCalGas’ 2017 Compliance Instrument Procurement Limit. Per General Order (GO) 66-C, Section 583 of the Public Utilities Code, and D.15-10-032, Attachment I is provided confidentially to the Energy Division. The GHG revenue requirements and net allowance proceeds available for return are summarized in the table below.


Description Forecast1 Recorded2 Forecast3 Recorded4 Forecast Recorded

GHG Revenue Requirement: 81.7 60.3 108.1 80.2 123.1 N/A

GHG Allowance Proceeds:

Allowance Proceeds (71.8) (68.4) (85.3) (77.7) (97.3) N/A Less: Outreach and Admin Expenses 3.7 1.3 3.9 0.7 4.0 N/A Net GHG Proceeds Available for Customer Returns (68.1) (67.1) (81.4) (77.0) (93.2) -

$ millions

12015 Forecast Revenue Requirement from Preliminary Statement filed January 20, 2015 in Rulemaking 14-03-003.22015 Recorded Compliance Instrument Costs and Allowance Proceeds are updated from those provided in AL 4877-A to include actual expenses for the entire year.32016 Forecast Revenue Requirement and Allowance Proceeds from AL 4877-A.42016 Recorded Compliance Instrument Costs and Allowance Proceeds includes actual expenses for January through September and forecasted expenses for October through December.

2015 2016 2017

Pursuant to D.16-04-013, SoCalGas is not requesting to place these revenues requirements in rates at this time pending further direction by the Commission. However, for illustrative purposes, rate impacts are provided in Attachment H under various scenarios that may be approved in the future. Protests Anyone may protest this AL to the Commission. The protest must state the grounds upon which it is based, including such items as financial and service impact, and should be submitted expeditiously. The protest must be made in writing and must be received within 20 days of the date of this AL, which is November 6, 2016. There is no restriction on who may file a protest. The address for mailing or delivering a protest to the Commission is:

CPUC Energy Division Attn: Tariff Unit 505 Van Ness Avenue San Francisco, CA 94102

Copies of the protest should also be sent via e-mail to the attention of the Energy Division Tariff Unit ([email protected]). A copy of the protest should also be sent via both e-mail and facsimile to the address shown below on the same date it is mailed or delivered to the Commission.

Attn: Sid Newsom Tariff Manager - GT14D6 555 West Fifth Street Los Angeles, CA 90013-1011 Facsimile No. (213) 244-4957 E-mail: [email protected]

Advice No. 5047 - 9 - October 17, 2016 Effective Date SoCalGas believes that this filing is subject to Energy Division disposition, and should be classified as Tier 2 (effective after staff approval) pursuant to GO 96-B. This filing is consistent with D.14-06-007 and therefore SoCalGas respectfully requests that this filing be approved November 16, 2016, which is thirty (30) calendar days after the date filed, for implementation and inclusion in rates effective January 1, 2017. Notice

A copy of this AL is being sent to SoCalGas’ GO 96-B service list and the Commission’s service list in A.14-11-014, TY 2016 GRC, A14-12-017, Phase I of 2017 TCAP, and R.14-03-003. Address change requests to the GO 96-B should be directed by electronic mail to [email protected] or call 213-244-3387. For changes to all other service lists, please contact the Commission’s Process Office at 415-703-2021 or by electronic mail at [email protected].

________________________________ Ronald van der Leeden

Director – Regulatory Affairs Attachments

CALIFORNIA PUBLIC UTILITIES COMMISSION ADVICE LETTER FILING SUMMARY

ENERGY UTILITY MUST BE COMPLETED BY UTILITY (Attach additional pages as needed)

Company name/CPUC Utility No. SOUTHERN CALIFORNIA GAS COMPANY (U 9O4G)

Utility type: Contact Person: Sid Newsom

ELC GAS Phone #: (213) 244-2846

PLC HEAT WATER E-mail: [email protected]

EXPLANATION OF UTILITY TYPE

ELC = Electric GAS = Gas PLC = Pipeline HEAT = Heat WATER = Water

(Date Filed/ Received Stamp by CPUC)

Advice Letter (AL) #: 5047

Subject of AL: Annual Regulatory Account Balance Update for Rates Effective January 1, 2017

Keywords (choose from CPUC listing): GRC, Balancing Account, Transportation Rates

AL filing type: Monthly Quarterly Annual One-Time Other

If AL filed in compliance with a Commission order, indicate relevant Decision/Resolution #:

D.11-04-032, D.14-06-007, and D.15-10-032

Does AL replace a withdrawn or rejected AL? If so, identify the prior AL: No

Summarize differences between the AL and the prior withdrawn or rejected AL1: N/A

Does AL request confidential treatment? If so, provide explanation: See the Declaration of Confidentiality.

Resolution Required? Yes No Tier Designation: 1 2 3 Requested effective date: 11/16/16 AL; 1/1/17 Rates No. of tariff sheets: 0

Estimated system annual revenue effect: (%): -10.4 %

Estimated system average rate effect (%): -10.4 %

When rates are affected by AL, include attachment in AL showing average rate effects on customer classes (residential, small commercial, large C/I, agricultural, lighting). Tariff schedules affected: None

Service affected and changes proposed1: See advice letter.

Pending advice letters that revise the same tariff sheets: None

Protests and all other correspondence regarding this AL are due no later than 20 days after the date of this filing, unless otherwise authorized by the Commission, and shall be sent to: CPUC, Energy Division Southern California Gas Company Attention: Tariff Unit Attention: Sid Newsom 505 Van Ness Ave., 555 West 5th Street, GT14D6 San Francisco, CA 94102 Los Angeles, CA 90013-1011 [email protected] [email protected] [email protected]

1 Discuss in AL if more space is needed.

ATTACHMENT AAdvice No. 5047

Natural Gas Transportation Rate RevenuesSouthern California Gas CompanySCG Regulatory Account Update

Present Rates Proposed Rates Changes

Sep-1-16 Average Sep-1-16 Jan-1-17 Proposed Jan-1-17 Revenue Rate % Rate

Volumes Rate Revenues Volumes Rate Revenues Change Change change

Mth $/therm $000's Mth $/therm $000's $000's $/therm %

A B C D E F G H I

1 CORE

2 Residential 2,337,534 $0.82577 $1,930,262 2,337,534 $0.74638 $1,744,688 ($185,574) ($0.07939) -9.6%

3 Commercial & Industrial 984,102 $0.43695 $430,002 984,102 $0.34777 $342,238 ($87,764) ($0.08918) -20.4%

4

5 NGV - Pre SempraWide 117,220 $0.22351 $26,200 117,220 $0.12953 $15,184 ($11,016) ($0.09398) -42.0%

6 SempraWide Adjustment 117,220 $0.00847 $993 117,220 $0.01685 $1,976 $983 $0.00838 99.0%

7 NGV - Post SempraWide 117,220 $0.23198 $27,193 117,220 $0.14639 $17,160 ($10,033) ($0.08559) -36.9%

8

9 Gas A/C 825 $0.23098 $190 825 $0.13604 $112 ($78) ($0.09494) -41.1%

10 Gas Engine 16,774 $0.15232 $2,555 16,774 $0.15231 $2,555 ($0) ($0.00000) 0.0%

11 Total Core 3,456,455 $0.69152 $2,390,202 3,456,455 $0.60951 $2,106,753 ($283,449) ($0.08201) -11.9%

12

13 NONCORE COMMERCIAL & INDUSTRIAL

14 Distribution Level Service 893,164 $0.07253 $64,783 893,164 $0.07188 $64,199 ($583) ($0.00065) -0.9%

15 Transmission Level Service (2) 654,456 $0.01839 $12,036 654,456 $0.01828 $11,966 ($70) ($0.00011) -0.6%

16 Total Noncore C&I 1,547,620 $0.04964 $76,819 1,547,620 $0.04921 $76,165 ($653) ($0.00042) -0.9%

17

18 NONCORE ELECTRIC GENERATION

19 Distribution Level Service

20 Pre Sempra Wide 333,969 $0.06483 $21,651 333,969 $0.06236 $20,827 ($824) ($0.00247) -3.8%

21 Sempra Wide Adjustment 333,969 ($0.00804) ($2,687) 333,969 ($0.00774) ($2,586) $101 $0.00030 -3.7%

22 Distribution Level Post Sempra Wide 333,969 $0.05678 $18,964 333,969 $0.05462 $18,241 ($723) ($0.00216) -3.8%

23 Transmission Level Service (2) 2,641,080 $0.01510 $39,868 2,641,080 $0.01319 $34,847 ($5,021) ($0.00190) -12.6%

24 Total Electric Generation 2,975,049 $0.01978 $58,832 2,975,049 $0.01784 $53,088 ($5,744) ($0.00193) -9.8%

25

26 TOTAL RETAIL NONCORE 4,522,669 $0.02999 $135,650 4,522,669 $0.02858 $129,253 ($6,398) ($0.00141) -4.7%

27

28 WHOLESALE & INTERNATIONAL (excluding SDG&E) 317,990 $0.01489 $4,736 317,990 $0.01293 $4,112 ($624) ($0.00196) -13.2%

29

30 OTHER SERVICES (SDG&E, UBS, & BTS) 1,247,558 $230,820 1,247,558 $233,946 $3,127

31 SYSTEM TOTAL w/BTS 9,544,672 $0.28931 $2,761,408 9,544,672 $0.25921 $2,474,064 ($287,344) ($0.03011) -10.4%

32

33 EOR Revenues 203,920 $0.03733 $7,613 203,920 $0.03526 $7,190 ($422) ($0.00207) -5.5%

34 Total Throughput w/EOR Mth/yr 9,748,592 9,748,592

1) These rates are for Natural Gas Transportation Service from "Citygate to Meter". The BTS rate is for service from Receipt Point to Citygate.

2) All rates include Franchise Fees & Uncollectible charges

ATTACHMENT BAdvice No. 5047

Authorized 09/2016 Amortization Proposed 01/01/2017 Amortization Proposed Change

Account Name Core Noncore Total System Core Noncore Total System Core Noncore Total System

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

REGULATORY ACCOUNTS1. Affiliate Transfer Fee Account (ATFA) ($151) ($10) ($161) $52 $3 $55 $203 $13 $216

2. FERC Settlement Proceeds Memorandum Account (FSPMA) ($488) $0 ($488) $53 $0 $53 $541 $0 $541

3. General Rate Case Memorandum Account (GRCMA) $43,896 $2,775 $46,671 $44,152 $2,744 $46,896 $255 ($31) $225

4. GRCMA Sub allocation for AB32 Admin Fees ($154) ($115) ($268) ($154) ($115) ($268) $0 $0 $0

5. Deductible Tax Repairs Benefits Memorandum Account (DTRBMA) ($48,692) ($3,077) ($51,769) ($30,116) ($1,871) ($31,987) $18,576 $1,206 $19,782

6. Core Fixed Cost Account (CFCA) $424,272 $0 $424,272 $86,177 $0 $86,177 ($338,095) $0 ($338,095)

7. Economic Practicality Shortfall Memorandum Account (EPSMA) $0 $415 $415 $0 $637 $637 $0 $222 $222

8. California Solar Iniative Thermal Memorandum Account (CSITPMA) $8,028 $4,385 $12,412 $12,704 $6,939 $19,643 $4,676 $2,554 $7,231

9. Enhanced Oil Recovery Account (EORA) ($1,939) ($198) ($2,136) ($2,856) ($291) ($3,147) ($917) ($93) ($1,011)

10. Transmission Integrity Mgmt Program Memorandum Account (TIMPBA - Local T) $2,888 $2,232 $5,120 $2,888 $2,233 $5,122 $0 $2 $2

11. Hazardous Substance Cost-Recovery Account (HSCRA) $29 $51 $79 $1,131 $1,990 $3,121 $1,102 $1,940 $3,042

12. Intervenor Award Memorandum Account (IAMA) $161 $284 $446 $38 $66 $104 ($124) ($218) ($341)

13. Gain / Loss on Sale Memorandum Account (GLOSMA) $0 $0 $0 ($93) ($6) ($99) ($93) ($6) ($99)

14. Master Meter Balancing Account (MMBA) $814 $51 $865 $591 $37 $627 ($223) ($15) ($238)

15. Montebello True-Up Tracking Account (MTTA) $2,671 $1,144 $3,814 $0 $0 $0 ($2,671) ($1,144) ($3,814)

16. New Environmental Regulation Bal Account (NERBA) - Admin Fees Subaccount ($194) ($145) ($338) $517 $387 $904 $711 $531 $1,242

17. New Environmental Regulation Bal Account (NERBA) - Subpart W Subaccount ($9,471) ($599) ($10,069) ($369) ($23) ($392) $9,102 $576 $9,677

18. Noncore Fixed Cost Account (NFCA) Margin $0 $3,518 $3,518 $0 ($1,530) ($1,530) $0 ($5,048) ($5,048)

19. Noncore Fixed Cost Account (NFCA) Nonmargin $0 $696 $696 $0 ($475) ($475) $0 ($1,171) ($1,171)

20. Integrated Transmission Balancing Account (ITBA) 2/ $1,761 $2,295 $4,056 ($663) ($864) ($1,527) ($2,424) ($3,159) ($5,583)

21. Compressor Station Fuel and Power Balancing Account (CFPBA) $23 $30 $54 $439 $572 $1,011 $416 $542 $958

22. Compression Services Balancing Account (CSBA) ($293) $0 ($293) ($34) $0 ($34) $259 $0 $259

23. Company-Use Fuel for Load Balancing Account (CUFLBA) $41 $74 $115 ($203) ($369) ($573) ($244) ($444) ($688)

24. System Reliability Memorandum Account (SRMA) $8,196 $14,426 $22,622 $2,868 $5,048 $7,916 ($5,328) ($9,378) ($14,705)

25. Noncore Storage Balancing Account (NSBA) ($197) ($347) ($545) $1,313 $2,311 $3,624 $1,511 $2,659 $4,169

26. Pension Balancing Account (PBA) ($34,307) ($2,168) ($36,475) ($17,911) ($1,113) ($19,024) $16,396 $1,055 $17,451

27. PBOP Balancing Account (PBOPBA) ($22,088) ($1,396) ($23,484) ($1,642) ($102) ($1,744) $20,446 $1,294 $21,740

28. Pipeline Safety and Reliability Memo Acct (PSRMA) - Local Transmission $1,203 $929 $2,132 $1,203 $930 $2,133 $0 $1 $1

29. Pipeline Safety and Reliability Memo Acct (PSRMA) - Distribution $1,538 $73 $1,611 $1,538 $73 $1,611 $0 $0 $0

30. Safety Enhancement Capital Cost Balancing Account (SECCBA) - Local Trans $821 $634 $1,455 $821 $635 $1,456 $0 $0 $0

31. Safety Enhancement Capital Cost Balancing Account (SECCBA) - Distribution $8,516 $405 $8,921 $8,516 $405 $8,922 $0 $0 $0

32. Safety Enhancement Expense Balancing Account (SEEBA) - Local Trans $3,960 $3,059 $7,019 $3,960 $3,061 $7,021 $0 $2 $2

33. Safety Enhancement Expense Balancing Account (SEEBA) - Distribution $10,200 $485 $10,685 $10,200 $485 $10,685 $0 $0 $0

34. Research Development and Demonstration Expense Account (RDDEA) $0 $0 $0 ($875) ($54) ($930) ($875) ($54) ($930)

35. Research Royalty Memorandum Account (RRMA) ($192) ($12) ($204) $0 $0 $0 $192 $12 $204

36. Self-Generation Program Memorandum Account (SGPMA) $2,947 $5,188 $8,135 $2,947 $5,188 $8,135 $0 $0 $0

37. Natural Gas Appliance Testing Memo Account (NGATMA) $0 $0 $0 $1,871 $116 $1,987 $1,871 $116 $1,987

38. Rewards & Penalties Balancing Account (RPBA) $3,682 $233 $3,915 ($212) ($13) ($225) ($3,894) ($246) ($4,140)

Total Regulatory Accounts $407,482 $35,315 $442,798 $128,852 $27,036 $155,888 ($278,630) ($8,280) ($286,910)

Notes:

1/ All amounts include FF&U.

2/ Forecasted SoCalGas ITBA December 31, 2016 balance is on a combined and re-allocated basis.

SOUTHERN CALIFORNIA GAS COMPANYSOCALGAS PRESENT AND PROPOSED REGULATORY ACCOUNT BALANCES (M$

ATTACHMENT CAdvice No. 5047

SOUTHERN CALIFORNIA GAS COMPANYGAS PRICE FORECAST - 2017

Row Labels 2017-01 2017-02 2017-03 2017-04 2017-05 2017-06 2017-07 2017-08 2017-09 2017-10 2017-11 2017-12 Total8/1/2016 3.36 3.34 3.30 3.03 3.00 3.03 3.06 3.07 3.05 3.08 3.13 3.27 3.148/2/2016 3.32 3.30 3.26 3.02 3.00 3.03 3.06 3.07 3.06 3.08 3.13 3.26 3.138/3/2016 3.39 3.38 3.33 3.07 3.04 3.07 3.10 3.11 3.09 3.11 3.16 3.29 3.188/4/2016 3.39 3.37 3.32 3.07 3.04 3.07 3.10 3.11 3.09 3.11 3.16 3.29 3.188/5/2016 3.34 3.33 3.28 3.04 3.01 3.05 3.08 3.09 3.07 3.09 3.14 3.27 3.158/8/2016 3.32 3.31 3.27 3.03 3.00 3.04 3.07 3.08 3.06 3.08 3.13 3.27 3.148/9/2016 3.23 3.23 3.19 2.96 2.94 2.98 3.01 3.02 3.00 3.03 3.08 3.22 3.078/10/2016 3.20 3.19 3.15 2.94 2.92 2.95 2.98 2.99 2.98 3.00 3.06 3.20 3.058/11/2016 3.19 3.19 3.15 2.93 2.91 2.95 2.98 2.99 2.97 2.99 3.05 3.20 3.048/12/2016 3.20 3.20 3.16 2.93 2.90 2.94 2.97 2.98 2.96 2.98 3.04 3.18 3.048/15/2016 3.21 3.21 3.16 2.93 2.91 2.94 2.97 2.98 2.96 2.99 3.04 3.18 3.048/16/2016 3.23 3.23 3.19 2.95 2.92 2.96 2.99 3.00 2.98 3.00 3.06 3.20 3.068/17/2016 3.22 3.22 3.18 2.94 2.91 2.94 2.98 2.99 2.97 2.99 3.05 3.20 3.058/18/2016 3.24 3.24 3.20 2.95 2.92 2.95 2.99 3.00 2.98 3.00 3.06 3.20 3.068/19/2016 3.15 3.16 3.12 2.90 2.88 2.92 2.95 2.96 2.94 2.96 3.02 3.17 3.018/22/2016 3.16 3.17 3.13 2.91 2.89 2.92 2.95 2.96 2.95 2.97 3.02 3.17 3.028/23/2016 3.24 3.24 3.20 2.95 2.93 2.95 2.98 2.99 2.98 3.00 3.05 3.19 3.068/24/2016 3.29 3.29 3.25 2.99 2.97 2.99 3.02 3.03 3.02 3.04 3.09 3.23 3.108/25/2016 3.33 3.32 3.28 3.01 2.97 3.00 3.03 3.04 3.02 3.04 3.10 3.23 3.118/26/2016 3.34 3.34 3.30 3.02 2.98 3.01 3.04 3.04 3.03 3.05 3.10 3.24 3.128/29/2016 3.33 3.33 3.28 3.02 2.99 3.02 3.05 3.06 3.04 3.06 3.12 3.25 3.138/30/2016 3.28 3.28 3.24 2.99 2.97 2.99 3.02 3.03 3.02 3.04 3.09 3.22 3.108/31/2016 3.33 3.33 3.28 3.02 2.99 3.02 3.05 3.05 3.04 3.06 3.12 3.25 3.139/1/2016 3.24 3.25 3.21 2.98 2.95 2.98 3.01 3.02 3.00 3.03 3.08 3.22 3.089/2/2016 3.23 3.23 3.20 2.97 2.95 2.98 3.01 3.02 3.00 3.02 3.08 3.21 3.079/6/2016 3.19 3.19 3.16 2.95 2.93 2.96 2.99 3.00 2.99 3.01 3.07 3.20 3.059/7/2016 3.18 3.18 3.14 2.94 2.92 2.95 2.98 2.99 2.98 3.00 3.06 3.19 3.049/8/2016 3.27 3.27 3.23 2.99 2.96 2.99 3.02 3.03 3.02 3.04 3.10 3.23 3.099/9/2016 3.24 3.25 3.21 2.99 2.96 2.99 3.02 3.03 3.02 3.04 3.10 3.23 3.099/12/2016 3.30 3.30 3.25 3.02 2.99 3.02 3.05 3.06 3.04 3.06 3.12 3.24 3.129/13/2016 3.30 3.30 3.26 3.03 3.00 3.03 3.06 3.07 3.05 3.07 3.12 3.25 3.13

Henry Hub average price 3.26 3.26 3.22 2.98 2.96 2.99 3.02 3.03 3.01 3.03 3.09 3.22 3.09Basis differential (1) -0.01 -0.24 0.02 0.06 0.02 -0.08 -0.19 -0.18 -0.12 -0.05 -0.10 -0.23 -0.09Total 3.27 3.50 3.21 2.93 2.94 3.06 3.21 3.20 3.13 3.08 3.19 3.45 3.18

Note 1/ represents a 2-year average basis differential between Henry Hub and SoCalBorder gas price.Note 2/ the projected gas price of $3.18/MMDth is increased by the projected backbone transmission rate to project the Citygate gas price of $3.38/MMDth.

ATTACHMENT DAdvice No. 5047

Line Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

actl actl actl actl actl actl actl actl fcst fcst fcst fcst

1 Beginning Balance (35,513) (35,829) (36,148) (36,469) (37,481) (37,758) (52,232) (54,878) (57,527) (60,176) (27,674) (30,175) (35,513)

1a Prior Period Adjustment - - - (868) - - - - - - - - (868)

1b Adjusted Beginning Balance (35,513) (35,829) (36,148) (37,336) (37,481) (37,758) (52,232) (54,878) (57,527) (60,176) (27,674) (30,175) (36,381)

2 Recorded Cost 272 272 271 448 316 (1,582) 0 (2) - 35,145 136 14,110 49,387

3 Authorized Cost 3,565 3,565 3,565 3,565 3,565 15,849 5,612 5,612 5,612 5,612 5,612 5,612 67,348

4 Net position (2-3): (3,293) (3,293) (3,294) (3,117) (3,249) (17,431) (5,612) (5,615) (5,612) 29,533 (5,476) 8,498 (17,961)

5 Amortization (2,988) (2,988) (2,988) (2,988) (2,988) (2,988) (2,988) (2,988) (2,988) (2,988) (2,988) (2,988) (35,853)

6 Current Month Adjustment (4-5): (305) (305) (306) (129) (262) (14,443) (2,624) (2,627) (2,625) 32,521 (2,488) 11,486 (53,814)

7 Current Month Interest**: (11) (14) (14) (16) (15) (31) (22) (22) (25) (19) (13) (11) (211)

8 Total Current Month Activity (6+7): (316) (319) (320) (145) (277) (14,474) (2,646) (2,648) (2,649) 32,502 (2,501) 11,475 17,681

9 Ending Balance (1b+8): (35,829) (36,148) (36,469) (37,481) (37,758) (52,232) (54,878) (57,527) (60,176) (27,674) (30,175) (18,700) (18,700)

** Interest applied to average monthly balance as follows: (((Beg. Bal.+(Beg. Bal.+Current Month Adjustment))/2)*(Int.Rate/12)

Interest Assumption: 0.36% 0.47% 0.47% 0.47% 0.48% 0.48% 0.49% 0.46% 0.50% 0.52% 0.52% 0.52%

Supporting Calculation - 2016 Net Pension Revenue/Costs Authorized Recorded

Cost Cost

Gross Revenue/costs 82,089 70,293

Lees: Amount capitalized (16,582) (19,569)

Less: Billings to SDG&E/Unregulated Affiliates (982) (1,799)

Plus: Billings from SDG&E 1,867 0

Depreciation/Return 1/ 956 462

Net Costs $67,348 $49,387

1/ Reflects the depreciation and return differential associated with authorized/actual capitalization.

SOUTHERN CALIFORNIA GAS COMPANY

PENSION BALANCING ACCOUNT (PBA)

(Over) / Under Collection M$

Year 2016

ATTACHMENT EAdvice No. 5047

Line Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

actl actl actl actl actl actl actl actl fcst fcst fcst fcst

1 Beginning Balance (23,350) (23,340) (23,375) (23,412) (23,464) (23,507) (12,526) (10,730) (8,932) (7,148) (5,363) (3,578) (23,350)

1a Prior Period Adjustment - - - 20 - - - - - - - - 20

1b Adjusted Beginning Balance (23,350) (23,340) (23,375) (23,392) (23,464) (23,507) (12,526) (10,730) (8,932) (7,148) (5,363) (3,578) (23,330)

2 Recorded Cost 132 90 88 53 81 (321) 14 14 1 1 1 78 230

3 Authorized Cost 2,039 2,039 2,039 2,039 2,039 (9,376) 137 137 137 137 137 137 1,639

4 Net position (2-3): (1,907) (1,949) (1,951) (1,986) (1,958) 9,054 (123) (123) (136) (136) (136) (59) (1,409)

5 Amortization (1,924) (1,924) (1,924) (1,924) (1,924) (1,924) (1,924) (1,924) (1,924) (1,924) (1,924) (1,924) (23,083)

6 Current Month Adjustment (4-5): 17 (25) (28) (63) (34) 10,978 1,801 1,801 1,788 1,788 1,788 1,865 (24,493)

7 Current Month Interest**: (7) (9) (9) (9) (9) 4 (5) (4) (3) (3) (2) (1) (58)

8 Total Current Month Activity (6+7): 10 (35) (37) (72) (43) 10,982 1,796 1,797 1,784 1,785 1,786 1,864 21,616

9 Ending Balance (1b+8): (23,340) (23,375) (23,412) (23,464) (23,507) (12,526) (10,730) (8,932) (7,148) (5,363) (3,578) (1,714) (1,714)

** Interest applied to average monthly balance as follows: (((Beg. Bal.+(Beg. Bal.+Current Month Adjustment))/2)*(Int.Rate/12)

Interest Assumption: 0.36% 0.47% 0.47% 0.47% 0.48% 0.48% 0.49% 0.46% 0.50% 0.52% 0.52% 0.52%

Supporting Calculation - 2016 Net PBOP Revenue/Costs Authorized Recorded

Cost Cost

Gross Revenue/costs 1,518 196

Lees: Amount capitalized (307) (55)

Less: Billings to SDG&E/Unregulated Affiliates (157) (5)

Plus: Billings from SDG&E 567 88

Depreciation/Return 1/ 18 6

Net Costs $1,639 $230

1/ Reflects the depreciation and return differential associated with authorized/actual capitalization.

SOUTHERN CALIFORNIA GAS COMPANY

POST RETIREMENT BENEFITS OTHER THAN PENSION BALANCING ACCOUNT (PBOBPA)Year 2016

(Over) / Under Collection M$

ATTACHMENT FAdvice No. 5047

Southern California Gas CompanyPension PlanBased on 2016 Draft Actuarial ResultsDevelopment of 2016 Minimum Required Contribution

1. 2016 Funding target liability $1,644,683,409

[ Net Effective Interest Rate ] 6.12%

2. 2016 Plan Actuarial Value of Assets $1,626,526,741

3. Funding shortfall [MAX [(1) - (2),0] ] $18,156,668

4. Excess assets [MAX [(2) - (1),0] ] $0

5. 2016 Plan Normal Cost $64,045,070

[includes estimated plan expenses of $11,000,000]

6. 2010 shortfall amortization charge (amortized through 2016) * 0






12. Funding shortfall base *

(a) Present value of 2010 shortfall amortization charge 0

[based on amortization over 1 years at 4.43%]

(b) Present value of 2011 shortfall amortization charge 0


(c) Present value of 2012 shortfall amortization charge 0


(d) Present value of 2013 shortfall amortization charge 0


(e) Present value of 2014 shortfall amortization charge 0


(f) Present value of 2015 shortfall amortization charge 0

[based on amortization over first 5 years at 4.43% and next year at 5.91%]

(g) 2016 funding shortfall base

[ ( 3 ) - ( 12(a) ) - ( 12(b) ) - ( 12(c) ) - ( 12(d) ) - ( 12(e) ) - ( 12(f) ) ] $18,156,668

13. 2016 Amortization factor

[based on amortization of shortfall over 7 years, assuming

a 4.43% rate for the first 5 years and 5.91% rate for the final 2 years] 0.16522343

14. 2016 funding shortfall to be amortized in 2016 - 2022 [ 12(g) x (13) ] $2,999,907

15. 2016 Minimum required contribution * $67,044,977 [ (5) + (6) + (7) + (8) + (9) + (10) + (11) + (14) , amount as of 1/1/2016 ]

Timing of 2016 Minimum Required Contribution Funding

First quarterly contribution deposited on April 1, 2016 $0

Second quarterly contribution deposited on July 1, 2016 $0

Third quarterly contribution deposited on October 3, 2016 $50,300,000

Final 2016 contribution estimated to be deposited on December 15, 2016 $20,050,433

Sum of payments made for the 2016 Plan Year $70,350,433

1/1/2016 Present value of 2016 Plan Year contributions $67,044,977

* If the plan does not have a funding shortfall, then prior shortfall amortization bases are deemed fully amortized and there is

no new shortfall amortization base for the current year. In addition, the minimum funding requirement is equal to the target

normal cost less the excess assets.

ATTACHMENT GAdvice No. 5047

Southern California Gas CompanyPostretirement Welfare Plans

Development of 2016 ContributionBased on Final Actuarial Results

1. 2016 APBO $724,496,799

2. Discount rate 4.50%

3. 2016 Fair Value of Assets $822,144,082

4. 2016 Plan Service Cost $14,101,908

5. Interest cost 32,459,454

6. Expected return on assets (57,420,214)

[ based on expected return of 7% on assets ]

7. Transition obligation amortization 0

8. Prior service cost amortization (2,551,265)

9. Unrecognized (gain)/loss amortization 0

10. Net periodic benefit cost ($13,410,117)

Timing of Estimated 2016 Contribution

Funding

Contributions through December 31 made primarily in quarterly installments $0

Line Description Forecast1 Recorded2 Forecast3 Recorded4 Forecast Recorded1 Gross Throughput (MMcf) 822,829 821,630 796,7582 Throughput to Covered Entities (MMcf) (410,647) (408,577) (386,822)3 Net Throughput to End Users (MMcf) (Line 1 + Line 2) 412,182 413,053 N/A 409,937 N/A

4 Lost and Unaccounted for Gas (MMcf) 6,253 6,063

5 Total Supplied Gas (MMcf) (Line 3 + Line 4) 412,182 419,306 N/A 416,000 N/A

6 Emissions Conversion Factor (MTCO2e/MMcf) 54.43 54.64 54.64

7 Compliance Obligation for End Users and LUAF (MTCO2e) (Line 5 * Line 6) 22,435,190 22,912,713 22,732,064

8 Compliance Obligation for Company Facilities (MTCO2e) 200,674 214,065 199,466

9 Gross Compliance Obligation (MTCO2e) (Line 7 + Line 8) 22,635,864 23,126,778 22,931,530

10 Directly Allocated Allowances (21,988,508) (21,545,943) (21,126,670) 11 Percentage Consigned to Auction 25% 30% 35%12 Consigned Allowances (Line 10 * Line 11) 5,497,127 6,463,782 7,394,33413 Net Compliance Obligation (MTCO2e) (Line 9 + Line 10+ Line 12) 6,144,483 8,044,617 9,199,194

14 Proxy GHG Allowance Price 13.06$ 13.20$ 13.15$

15 Compliance Instrument Cost 80,246,950$ 59,223,936$ 106,188,942$ 78,575,744$ 121,006,199$ 16 Interest 31,088$ 225,026$ 17 Franchise Fees & Uncollectibles 1,415,556$ 1,045,259$ 1,873,173$ 1,368,805$ 2,101,933$ 18 Revenue Requirement (Line 15 + Line 16 + Line 17) 81,662,507$ 60,300,283$ 108,062,115$ 80,169,576$ 123,108,132$ N/A

19 Previous Year's Cost Balancing Subaccount Balance w/ FFU -$ -$ -$ 20 Revenue Requirement to be Included in Rates (Line 18 + Line 19) 81,662,507$ 108,062,115$ 123,108,132$

21 Covered Entity Rate Impact ($/therm)5

22 Non-Covered Entity Rate Impact ($/therm)5

Illustrative Rate Impacts: For Informational Purposes Only 2017 Rev Req + 50% of 2015 and 2016 Rev Reqs $0 $0 $217,970,443 2017 Rev Req + 50% of 2015 Rev Req $0 $0 $163,939,385 2017 Rev Req only $0 $0 $123,108,132 2017 Rev Req + 50% of 2015 and 2016 Rev Reqs (excl. end-user rev req) $0 $0 $12,169,399 2017 Rev Req + 50% of 2015 Rev Req (excl. end user rev req) $0 $0 $8,436,848 2017 Rev Req only (Excl. end user rev req) $0 $0 $7,103,332

Non-Covered Entity Rate Impacts ($/therm) 2017 Rev Req + 50% of 2015 and 2016 Rev Reqs $0.00000 $0.00000 $0.05245 2017 Rev Req + 50% of 2015 Rev Req $0.00000 $0.00000 $0.03955 2017 Rev Req only $0.00000 $0.00000 $0.02959Covered Entity Rate Impacts ($/therm) 2017 Rev Req + 50% of 2015 and 2016 Rev Reqs $0.00000 $0.00000 $0.00127 2017 Rev Req + 50% of 2015 Rev Req $0.00000 $0.00000 $0.00088 2017 Rev Req only $0.00000 $0.00000 $0.00074

Table A Notes:

Supporting Information:FF&U % 1.764% 1.764% 1.764% 1.737% 1.737%LUAF % 0.761% 0.761% 0.761% 0.761% 0.761%System Throughput 9,544,672 9,544,672 9,544,672Non-Covered Entity Throughput 4,040,305 4,040,305 4,021,584

Revenue Requirement to be Included in Rates w/FFU End-User Revenue Requirement w/FFU 78,995,473$ 100,597,014$ 116,004,800$ LUAF Revenue Requirement w/FFU -$ 4,589,599$ 4,433,980$ Company Facilities Revenue Requrement w/FFU 2,667,033$ 2,875,503$ 2,669,352$ Total Revenue Requirement w/FFU 81,662,507$ 108,062,115$ 123,108,132$

Cost Balancing Account Balances End-User w/ FFU -$ -$ -$ LUAF w/ FFU -$ -$ -$ Company Facilities w/ FFU -$ -$ -$ Total Balancing Accounts w/FFU -$ -$ -$ Total GHG Costs in Rates w/ FFU 81,662,507$ 108,062,115$ 123,108,132$

Revenue Requirement to be Included in Rates w/out FFU End-User Revenue Requirement w/out FFU 77,626,148$ 98,853,243$ 114,024,149$ LUAF Revenue Requirement w/out FFU -$ 4,510,041$ 4,358,274$ Company Facilities Revenue Requrement w/out FFU 2,620,802$ 2,825,658$ 2,623,776$ Total Revenue Requirement w/out FFU 80,246,950$ 106,188,942$ 121,006,199$

Cost Balancing Account Balances End-User w/o FFU -$ -$ -$ LUAF w/o FFU -$ -$ -$ Company Facilities w/o FFU -$ -$ -$ Total Balancing Accounts w/o FFU -$ -$ -$ Total GHG Costs in Rates w/out FFU 80,246,950$ 106,188,942$ 121,006,199$

Check -$ -$ -$

ATTACHMENT HAdvice No. 5047

Table A: Forecast Revenue Requirement2015 2016

12015 Forecast Revenue Requirement from Preliminary Statement filed January 20, 2015 in Rulemaking 14-03-003.22015 Recorded Compliance Instrument Costs are updated from those provided in AL 4877-A to include actual expenses for the entire year.

5Not included, pending Application for Reahearing

2017

3201 Forecast Revenue Requirement from AL 4877-A.42016 Recorded Compliance Instrument Costs includes actual expenses for January through September and forecasted expenses for October through December.

2015 2016 2017

Attachment H – Table A Description SoCalGas’ Gross Compliance Obligation is calculated as the 2017 throughput forecast in the most recent California Gas Report less the throughput associated with covered entities plus an estimate for LUAF gas and a forecast of emissions for SoCalGas’ applicable Covered Facilities. SoCalGas’ directly allocated allowances are reduced by 35%, which is the minimum consignment percentage required for 2017 by the Cap-and-Trade Program regulations. The Proxy GHG Allowance Price is the 5-day average of forward prices for October 3-7 on the Intercontinental Exchange (ICE) for a California Carbon Allowance (CCA) with December delivery in 2017. The resulting 2017 Forecast Revenue Requirement is $123.1 million (including FF&U). This is composed of $116.0 million for end-users, $4.4 million for LUAF gas, and $2.7 million for company facilities. To the extent that any of these revenue requirements are ultimately approved for inclusion in rates in 2017, they will be grossed-up to ensure full recovery over the remainder of 2017. Note that Table A (line 19) includes a Previous Year’s Cost Balancing Subaccount Balance of $0, even though the three GHG Balancing Account (GHGBA) cost subaccounts are forecast to be undercollected a combined total of $141.5 million as of December 31, 2016. This is because, as explained previously, D.16-04-013 granted limited rehearing of D.15-10-032 and put in hold the introduction of GHG costs into rates as well as the disbursement of any GHG proceeds. However, SoCalGas 2015 and 2016 revenue requirements, which total $189.7 million, have also been approved but have yet to be included in rates. Should SoCalGas be authorized to eventually amortize these revenue requirements in rates, the undercollected balance in the GHGBA cost subaccounts would decrease, and any proposed amortization here would amount to “double counting” of those costs. Therefore, until the Commission provides further guidance in R.14-03-003 regarding the timing of the amortization of these revenue requirements, SoCalGas cannot estimate the appropriate Cost Balancing Subaccount Balance at this time. Also note that Table A does not include rate impacts (lines 21 and 22). For illustrative purposes only pending direction in R.14-03-003, SoCalGas is providing 2017 System-average rate impacts for Covered Entities (who are only responsible for costs associated with LUAF gas and company facilities) and Non-Covered Entities (who are responsible for all GHG related costs) beneath Table A under three scenarios:

• In the first scenario, SoCalGas’ 2015 and 2016 revenue requirements are collected 50% in 2017 and 50% in 2018.

• In the second scenario, 50% of just the 2015 revenue requirement is collected in 2017 and 50% in 2018, while the 2016 revenue requirement would be collected 50% in each of the years 2019 and 2020.

• The third scenario shows the illustrative rate impacts of just the 2017 revenue requirement.

Table C: GHG Allowance Proceeds

Line Description Forecast1 Recorded2 Forecast3 Recorded4 Forecast Recorded

1 Proxy GHG Allowance Price ($/MT) 13.06$ 13.20$ 13.15$

2 Directly Allocated Allowances 21,988,508 21,545,943 21,126,670 3 Percentage Consigned to Auction 25% 30% 35%4 Consigned Allowances 5,497,127 6,463,782 7,394,334

5 Allowance Proceeds (71,792,479)$ (68,370,517)$ (85,321,922)$ (77,426,331)$ (97,265,069)$ 6 Previous Year's Revenue Balancing Subaccount Balance -$ -$ -$ 7 Interest (47,130)$ (312,544)$ 8 Subtotal Allowance Proceeds ($) (Line 5 + Line 6 + Line 7) (71,792,479)$ (68,417,647)$ (85,321,922)$ (77,738,875)$ (97,265,069)$ N/A

9 Outreach and Admin Expenses ($) (from Table D) 3,656,000$ 1,345,791$ 3,884,083$ 708,719$ 4,021,629$ N/A

10 Net GHG Proceeds Available for Customer Returns ($) (Line 8 + Line 9) (68,136,479)$ (67,071,856)$ (81,437,839)$ (77,030,156)$ (93,243,440)$ N/A

11 Number of Residential Households 5,432,358 5,948,156 6,128,113 12 Per Household California Climate Credit ($) (Line 10 / Line 11)5

Illustrative Climate Credits: For Informational Purposes Only 2017 Net GHG Proceeds + 50% of 2015 and 2016 Net GHG Proceeds $0 $0 $168,030,599 2017 Net GHG Proceeds + 50% of 2015 Net GHG Proceeds $0 $0 $127,311,680 2017 Net GHG Proceeds $0 $0 $93,243,440

California Climate Credit to Residential Households 2017 Net GHG Proceeds + 50% of 2015 and 2016 Net GHG Proceeds $0.00 $0.00 $27.42 2017 Net GHG Proceeds + 50% of 2015 Net GHG Proceeds $0.00 $0.00 $20.78 2017 Net GHG Proceeds $0.00 $0.00 $15.22California Climate Credit to All Non-Covered Entities 2017 Net GHG Proceeds + 50% of 2015 and 2016 Net GHG Proceeds $0.00 $0.00 $26.52 2017 Net GHG Proceeds + 50% of 2015 Net GHG Proceeds $0.00 $0.00 $20.09 2017 Net GHG Proceeds $0.00 $0.00 $14.71

Table C Notes:

5Not included, pending Application for Reahearing

Supporting Information:Number of Residential Households 6,128,113 Number of Non-Residential Non-Covered Entities 208,980

ATTACHMENT HAdvice No. 5047

2015 2016

12015 Forecast Allowance Proceeds from Preliminary Statement filed January 20, 2015 in Rulemaking 14-03-003.

22015 Recorded Allowance Proceeds and interest updated from that provided in AL 4877-A to include actual expenses for the entire year.32016 Forecast Allowance Proceeds from AL 4877-A.

2017

42016 Recorded Allowance Proceeds and interest includes actual expenses for January through September and forecasted expenses for October through December.

2015 2016 2017

Attachment H – Table C The same Proxy GHG Allowance Price is used for the forecast of GHG Allowance Proceeds as for the Forecast Revenue Requirement discussed in Table A. Table C estimates the consigned allowances as 35% of SoCalGas’ directly allocated allowances for 2017, consistent with Table A. The 2017 Outreach and Administration Expenses are incorporated from Table D. In total, SoCalGas forecasts net 2017 GHG Allowance Proceeds of $93.2 million. For the same reason as described above for Table A, Table C (Line 6) includes a Previous Year’s Revenue Balancing Subaccount Balance of $0, even though the subaccount is forecasted to be overcollected approximately $146.2 million as of December 31, 2016. SoCalGas’ 2015 and 2016 net GHG proceeds available for customer returns, which total $149.6 million, have also been approved but have yet to be includes in rates. Also as with Table A, Table C does not include a proposed California Climate Credit (Line 12). For illustrative purposes only pending direction in R.14-03-003, SoCalGas is providing 2017 California Climate Credit estimates below in Table C under six scenarios:

• In the first scenario, the California Climate Credit continues to be provided only to residential customers, and SoCalGas’ 2015 and 2016 revenue requirements are returned 50% in 2017 and 50% in 2018.

• In the second scenario, California Climate Credits for residential customers are calculated with 50% of just the 2015 revenue requirement to be returned in 2017 and 50% in 2018, while the 2016 revenue requirement will be returned 50% in each of the years 2019 and 2020.

• The third scenario provides the illustrative California Climate Credit for residential customers calculated with just the 2017 revenue requirement.

• The fourth, fifth, and sixth scenarios are the same as the first three scenarios, except that the California Climate Credit is provided to all non-covered entities.

Table D: GHG Outreach and Administrative Expenses

Line Description Forecast1 Recorded2 Forecast3 Recorded4 Forecast Recorded1 Outreach Expenses2 Detail of Outreach Activity ($) 2,000,000$ 646,548$ 2,000,000$ 12,144$ 2,000,000$ 3 Subtotal Outreach ($) 2,000,000$ 646,548$ 2,000,000$ 12,144$ 2,000,000$ N/A

4 Administrative Expenses5 Acquisition ($) 276,000$ 291,460$ 269,912$ 197,825$ 299,807$ 6 Billing ($) 573,000$ 3,848$ 783,578$ 160,300$ -$ 7 Program Management ($) 807,000$ 403,339$ 830,593$ 332,356$ 1,721,822$ 8 Subtotal Administrative ($) 1,656,000$ 698,647$ 1,884,083$ 690,481$ 2,021,629$ N/A

9 Subtotal Outreach and Administrative ($) 3,656,000$ 1,345,195$ 3,884,083$ 702,625$ 4,021,629$ 10 Interest ($) 596$ 6,094$ 11 Total ($) 3,656,000$ 1,345,791$ 3,884,083$ 708,719$ 4,021,629$ N/A

Notes:

ATTACHMENT HAdvice No, 5047

42016 Recorded expenses includes actual expenses for January through September.

32016 Forecast Expenses from AL 4877-A.

20172015 2016

12015 Forecast Acquisition and Program Management Expenses from Preliminary Statement filed January 20, 2015 in Rulemaking 14-03-003. 2015 Forecast Outreach and Billing expenses from Opening Comments filed February 27, 2015 in Rulemaking 14-03-003.22015 Recorded expenses are updated from those provided in AL 4877-A to include actual expenses for the entire year.

Attachment H – Table D D.15-10-032 approved SoCalGas’ supplemental customer education and outreach plan, and authorized SoCalGas to track and record outreach costs in the GHG Memorandum Account (GHGMA).1 However, this outreach plan was never put into place due to the Commission’s granting of rehearing. At this point, SoCalGas is including for 2017 the same $2.0 million forecast for outreach costs as included in AL 4877-A for 2016, pending the result of the rehearing. SoCalGas’ forecasts incremental administrative costs at $4.0 million. These consist of program management and acquisition-related costs. SoCalGas will potentially have billing costs as a result of the rehearing, but cannot forecast those costs at this time. Actual administrative costs for the twelve-month period of October 1, 2015 to September 30, 2016 total $1.5 million2 consisting of outreach costs of $0.7 million, program management costs of $0.4 million, acquisition-related costs and billing costs of $0.4 million, and a minor amount for regulatory account interest. Pursuant to D.15-10-032, outreach and administrative expenses are to be recovered from GHG allowance proceeds. As discussed above, SoCalGas proposes to transfer $1.5 million in allowance proceeds from the Consignment Revenue Subaccount of the GHGBA to the GHGMA to offset actual expenses, including interest, recorded in the GHGMA as of September 30, 2016. As noted in AL 4877-A, subsequent annual transfers of allowance proceeds will be proposed to offset administrative costs recorded in the GHGMA for the following twelve-month period ending September 30th in connection with SoCalGas’ next annual Regulatory Account Balance Update filing.

1 D.15-10-032 at p. 65, Ordering Paragraph 16. 2 $0.8 million for the last three months of 2015 (total admin costs of $1.3 million for 2015 less $0.5 million already approved by AL 4877-A for the first nine months of 2015) plus $0.7 million for the first nine months of 2016.

Table E: Compliance Obligation Over Time2015 2016 2017 2018 2019 2020

Natural Gas Fuel Supplier Compliance Obligation (MTCO2e) 20,448,387 N/A N/A N/A N/A N/ACompany Facility Compliance Obligation (MTCO2e) 238,948 N/A N/A N/A N/A N/A

ATTACHMENT HAdvice No, 5047

ATTACHMENT I

Advice No. 5047

Net Natural Gas Compliance Obligation Purchase Limits and Recorded GHG Costs

CONFIDENTIAL AND PROTECTED MATERIAL PROVIDED ONLY TO THE ENERGY DIVISION PURSUANT TO PUC SECTION 583, GO 66-C, AND D.16-08-024

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ATTACHMENT A

SoCalGas Request for Confidentiality on the following information in Attachment I of Advice Letter 5047

Location/Title of ProtectedInformation

Legal Justification for Withholding

Basis for Confidentiality Treatment

Advice Letter 5047 Attachment I – Net Natural Gas Compliance Obligation Purchase Limits – items shaded in gray

D.15-10-032, including AppendixB (Greenhouse Gas Information Confidentiality Protocols, Section1.d) GO 66-C Section 2.2(b) Gov’t Code §§6254(k), 6254.7 (d), Evidence Code 1060, Civil Code §3426 et seq.

Commercially sensitive Cap-and-Trade information such as internal forecast of compliance obligation falls under the “Confidential” category included in the Confidentiality Protocols of D.15-10-032 (Appendix B). Disclosure of this information would place SoCalGas at an unfair disadvantage relative to other Cap-and-Trade market participants and result in higher Cap-and-Trade compliance costs for SoCalGas and its end-use ratepayers. SoCalGas derives economic value from this trade secret information being confidential, as it gives SoCalGas an opportunity to obtain a business advantage over competitors in the Cap-and-Trade market who do not know or use it.

Advice Letter 5047 Attachment I – Table B: Recorded GHG Costs

17 CCR Section 95914(c)(1) D.15-10-032, including AppendixB (Greenhouse Gas Information Confidentiality Protocols Sections 1.a to 1.c.) GO 66-C Section 2.2(b) Gov’t Code §§6254(k), 6254.7 (d), Evidence Code 1060, Civil Code §3426 et seq.

17 CCR Section 95914(c)(1) of the Cap- and-Trade regulations prohibits disclosure of any auction-related information, except when the release is made by a privately-owned utility to its regulatory agency pursuant to its rules, orders or decisions (Section 95914(c)(2)). Violation of Section 95914 may subject SoCalGas to penalties by the California Air Resources Board. Auction-related information also falls under the “Confidential” category included in the Confidentiality Protocols of D.15-10-032 (Appendix B). Disclosure of this information would place SoCalGas at an unfair business

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disadvantage relative to other Cap-and-Trade market participants and results in higher Cap-and-Trade compliance costs for SoCalGas and its end-use ratepayers. SoCalGas derives economic value from this trade secret information being confidential, as it gives SoCalGas an opportunity to obtain a business advantage over competitors in the Cap-and-Trade market who do not know or use it.

november 3, 2016 advice letter 5047-g subject: annual ... · 4 al 4513-a is effective from november...

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